Twelve Risks for Business

I read a quote from the film Indecent Proposal in a blog this week

‘A life without risk is like no life at all’.

It got me thinking about risk in business.

Often in Hollywood films, the risk takers jump in with both feet, make the money, or achieve their objectives (and get the girl too!).

But in business, the opposite is true. The repeated, successful risk takers go in with their eyes open, measure the risk, and understand exactly what they are doing long before they take the plunge.

If you think otherwise you make a big mistake. It’s almost like those naughty boys that we all knew in class. The ones that were brighter than average, and when they said they hadn’t worked very hard, they meant it. No matter what though, they always seemed to do well at school when it mattered. They led many of their less bright friends to behave in exactly the same way, only to flunk out at school.

Don’t fall into the same trap: Hearing these captains of industry and business gurus talk about taking risks can be deceiving.

They will take big risks with big wins, but they are taken knowing that behind them are a huge team of people researching, checking and tending to the basics. This leaves the ‘Captain’ to look like a maverick risk taker and genius, when all along he’s minimising the risks and jumping in only after checking, double checking and lots of due diligence!

In your business, particularly if you are an owner manager, you do not have such luxuries. You have to keep an eye looking over your shoulder and pay attention to the issues all around you at the same time. No one tends to the basics unless you do – and it’s easy to ignore them as they are often outside your experience and you can fail to see their significance as a result.

Some basic risks in your business are more obvious than others. You should look at all of these risks, deal with the ones that you take the most often and leave the real risk taking for areas that you really know about.
As an early Christmas present, here are my 12 biggest risks for you to look at in your business.

1. Not having enforceable terms and conditions with your clients (or worse, not having any terms of business at all…).
2. Not regularly checking the existing client base for adverse information or changes to their status.
3. Not knowing the exact registered name of your clients?
4. Not checking that any new account clients are credit worthy before you give them goods or services on account.
5. Not making sure that larger clients haven’t bound you to their terms because you failed to bind them to yours.
6. Not having clear agreements in place with your partners/Co-Directors.
7. Not checking your new staffs’ references properly.
8. Not having a proper contract of employment and handbook.
9. Failing to set your business up in the right way to make sure you benefit when it’s time to sell up.
10. Not chasing your bills a day or two before the due date to make sure your late payers pay on time.
11. Not keeping your chaser letters and phone calls as a short a process as possible to intensify the pressure for payment.
12. Allowing your collection process to peter out or never passing cases out for collection to a third party.

Consider them all, choose the ones you want to address now, the ones that can wait a month or two, and the ones you can leave until next year, but do it thoughtfully. Tending to these basics makes sure that if things go wrong, you have a chance of putting it right. Without them you could be a sitting duck.

Minimising the obvious risks leaves you free to concentrate on doing what you do best.